Bitcoin Price Targets For Next Bull Run
The Blockchain Sector 2023-06-28
I’ve been doing some research recently to create a plan for the next few years. I currently hold very little stablecoins and have been fully allocated with my crypto portfolio since the first weekend it broke below $20k. In the next bull run I would like to ideally sell into demand to get back to somewhere between a 80:20 and a 60:40 portfolio of crypto:stables.
Timing markets is difficult and I do not aspire to predict the future. My thesis is that blockchain technology is important and the economics of digital assets means they should appreciate relative to an inflating USD over time.
The Bitcoin halving is in April next year and I would like to see a new bull market and all time high in 2024-2025. This is by no means guaranteed but whenever the next bull market arrives I want to go into the chaos with a plan which is what the rest of this post is about.
The general idea that I built this around is to identify 4 areas of high time frame resistance. Price points where there might be a reversal or significant selling pressure and then front run these by selling on the approach to these areas of expected supply.
When price get’s close to these key levels I’ll sell 10% of the portfolio back to stables or risk off by creating delta neutral strategies. Between levels I’ll be rebalancing as price moves up to achieve 90:10, 80:20, 70:30 and 60:40 portfolio of crypto:stablecoins.
Resistance Level 1 - $95,000
There is going to be significant resistance around the $65k price level and previous all time high but I have little interest in liquidating assets here. The first key level that interests me and probably a lot of market participants is $100,000
The potential for Bitcoin to break $100k is going to be big news, it will bring a lot of euphoria and attention back to crypto. This is the ideal market conditions to sell into despite the fact I know I will be “bullish at resistance”.
There’s a trendline from the two previous tops in 2021 which could be an interesting level and will likely offer some resistance on the approach to $100k.
Everyone wants to frontrun the market and I believe an increase in supply should slow down volatility on the approach. When price starts to curve off or gets near these levels it would be a good time to take some partial profits.
If Bitcoin then fails to break $100k in the next cycle I think this is absolutely fine too. I would end up with a 90:10 crypto portfolio which gives a bit of dry powder to try to pick the next bottom and the supercycle thesis becomes a popular narrative.
Resistance Level 2 - $145,000
The next level I have picked out is around $150k where the long term logarithmic curve comes into play.
A breakout from $100k could be significant and price may jump up swiftly powered by news flow. News will attract retail crypto traders similar to previous cycles but in this cycle there will be an influx of demand from institutions, hedge funds, family offices and wealth managers due to the availability of ETF’s.
This will likely cause regulators and politicians to panic and I expect knee jerk reactions from nation states with a vested interest in protecting their fiat currencies, which could cause a sharp sell off and local top.
Blow off tops are notoriously hard to trade so here it might make sense to set limit orders rather than TWAP out of another 10%.
Another option here would be to use funds as collateral to take a short position on futures exchanges because funding rates will likely be astronomical. This basis trade would create a delta neutral position for the same percentage of the portfolio while at the same time collecting the funding premium that longs pay shorts.
This is also an area where I would like to be risking off alts and putting some funds back in to majors to ensure the portfolio carries lower beta. Hard to plan this ahead of time as it depends on the opportunities available and expected value of those opportunities.
A blow off top certainly isn’t the time to be moving up the risk curve and allocating higher percentages to long term lower quality investments
At this stage an 80:20 portfolio would be very comfortable, providing a couple of bullets to fire at a later date.
Resistance Level 3 - $175,000
This level is really the higher end of the previously discussed selling band and if BTC gets there next cycle I think it has done very well. Focus will start to shift to $1 million dollar Bitcoin predictions and greed will be prevalent throughout the industry.
If we get a continued climb up to somewhere between $150-200k then I would be exceptionally happy to liquidate another 10% into stables giving a 70:30 portfolio.
Again this could happen quite quickly with a media crypto frenzy or it could grind up over a longer period as the blockchain sector matures and crypto becomes a more accepted asset class.
A longer term TWAP strategy could work well if market volatility calms down otherwise limit orders and alarms going off in the middle of the night seem inevitable.
Resistance Level 4 - $240,000
This is the very top end of what I think is possible for Bitcoin in the next cycle. I believe it is somewhat unlikely that we actually reach this level unless something fundamentally changes and that might not be a net positive.
If Bitcoin can get close to a quarter of a million USD then it will have exceeded most expectations, 15x from the 2022 lows, blockchain sector > gold by market cap and crypto bros will be unsufferable.
Around this level the entire industry will be arguably overvalued and I would sell off the final 10% to reach the 60:40 maximum risk off portfolio while reducing alt exposure to very small amounts of high conviction plays.
If someone asks me “what can Bitcoin get up to in the next cycle?” I would answer a quarter of a mil, but this is very different to what is the most likely outcome.
I hope you’ve found this write up useful. Note that I don’t have a crystal ball and my expectations of crypto markets are biased by working in the industry. I am not a financial advisor, do your own research and make your own plans.
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